The Operating Cycle Is Equal to Days' Sales Uncollected Plus

question 110

True/False

The operating cycle is equal to days' sales uncollected plus days' inventory on hand.

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Definitions:

Illusory Promise

A statement that appears to be a binding commitment but allows for so much discretion that it does not legally bind the party making it.

Promisor

The party in a contract who makes a promise to perform or provide a benefit to the promisee.

Statute of Limitations

A law that sets the maximum time after an event within which legal proceedings may be initiated.

Previous Debt

An obligation or a financial liability that was incurred before the current period or transaction being considered.